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Retailers Want Moratorium On New Internet Taxes Nixed
This Associated Press story says (surprise, surprise) that retailers like Wal-Mart, Target and Circuit City don't want a permanent exemption on new Internet taxes, saying that it's unfair to traditional retailers. Congress created the Advisory Commission on Electronic Commerce to consider just such issues. So far their recommendations have been in favor of the wired purchaser, establishing and now continuing the current moratorium on new online taxes. The question doesn't seem to be whether online sales will be taxed -- it's when, and how.
Also, consider how much money the governments will lose
Ah yes, the infamous "losing" of money. Just as the MPAA/RIAA claim to "lose" gazillions on every pirated MP3, warez, etc. because those college kids would have paid full price for everything. Name one year the government "lost" money in taxes, where it was less than the previous year. It doesn't happen. The government just wants more and more every year, and then some.
The brick and mortar business are paying for roads, police and fire departments, local city improvements, etc with their taxes.
And some yocal selling stuff out of their home doesn't pay property tax? I can't imagine how this country ran before 1995 without an Internet tax. I mean, without roads, police, fire dept, etc, they were crippled! We self employed types get to pay about 30% in taxes to the feds as well. So don't try claiming they're hurting either. Ah to be Amish, they are the last of the truely free.
This is the same logic as what New York fell into. They are starting to see a decrease in sales of cigarettes because they have so many taxes on them. For some crazy reason beyond any of their lawmaker's grasp, having $4 in taxes per pack isn't enough to fund what they had slated to do with it. Now all these smokers won't get treatment for their decision, schools won't get upgraded, blah, blah, blah. They "expect" a certain level of taxes, and the people go and change their habits. How dare they!! You damn New Yorkers better start buying thousands of packs, or you will kill every poor, innocent smoker because they can't control themselves or pay for what they choose to do.
If they charge the tax rate of the city the company is in, we end up with the wealthiest cities charging internet companies almost no taxes to lure them there
Oh dear, we cannot have competition getting in the way of our beloved taxes! That would be so unfair. Boohoo! I also hereby declare that no business engage in the evil practice of "sales." It is unfair to expect a "mom and pop" store to compete with WalMart. Therefore, I will lobby Congress to come out with a nice, fair, balanced list of acceptable prices for cheese, milk, and motherboards. Why should we stop there? Smaller business cannot afford to pay what Microsoft or RedHat can pay their employees. This list shall also contain acceptable price ranges for all employees. Ranges will be used for diversity, but not to exceed more than 3.25%. This way people won't think it's Communism or anything. The federal governement should also curtail the number of people in all forms of jobs via the Census. We cannot have too many lawyers, so starting today, at birth every child will be assigned a job title. They will be expected to study in this field and ready to enter it no latter than their 30th birthday. This gives them plenty of time for "freedom." Well, until a new law is passed shortening this period. Thirty years is a long time, you didn't really expect it to stay at that number, did you?
Not to mention the burden is already on the companies to actually pay the sales tax to the state. So we already have this evil competition going on. And look what it's doing to the country. Screw fairness, I say!
Hippies piss me off.
I'm really getting sick and tired of this whole debate about taxing the internet, mostly because both sides of the issue tend to be grievously misinformed. OK, here goes:
/really/ saying is not that the 'net should be taxed, since it already is, but that it should bear the burden of an *extra* tax. If you know what sales taxes are supposedly for, you know how ridiculous this is. The point of a sales tax is to fund government actions and policies that benefit local businesses. Tourism boards are a perfect example. This is why resort towns tend to have super-high sales tax, so the gov't can subsidize seasonal businesses and other firms that would not otherwise be able to survive there.
Internet sales ARE TAXED, in exactly the same way as mail order sales, because "E-COMMERCE" IS JUST MAIL-ORDER.
What's the difference between submitting a form on a website and filling out a paper order form? Between enumerating your purchase on your computer versus doing it over the phone? There IS no fundamental difference, and that's why 'net sales and mail-order are currently the same in the eyes of the law. To wit, if you buy from a vendor that has operations in your state, you pay your state's sales tax; if the vendor is out of state, you pay no tax.
What all the whiny, inefficient, yesteryear retailers are
Anyway, I'm biased by my personal belief in freedom, that being the freedom from the initiation of force. I agree with the words of Frederic Bastiat, when he called a tax that does not benefit all citizens equally, "legalized plunder". So I don't believe in 99% of the taxes levied against the citizens of this country, or most others for that matter.
More to the point, as another poster pointed out, the federal gov't has no Constitutional authority to tax the internet, so in order to do so legally they would need to amend the Constitution. I must confess that I do not expect the Supreme Court to share that interpretation, nor do I expect Congress to actually even consider whether its legal or not when they sit down to vote away our prosperity.
MoNsTeR
That should be the end of the discussion, at least concerning the imposition of state sales taxes on out-of-state vendors. A State is free to tax or not tax sales of goods within their borders. They do not have the power to impose their taxes on the citizens of other states.
Mea navis aericumbens anguillis abundat
Ok first point, you are totally neglecting the additional costs which almost every retailer faces. High overhead (e.g., the store front, sales personel, training, support, maintance, cleaning, parking, liability on your lots, etc etc etc) I'm sorry to tell you this, but these things do not come cheaply. In fact, they are very expensive.
Compare this with online retailers, who are almost by definition driven primarily by computers. This reduces the need for hired help substantially. Not only that, but the dotcoms gets the benefit of locating where ever it wants. The DotCom can use affordable quality labor for their shipping operations, yet still target high rent areas. Furthermore, The dotcom can consolidate all of their shipping into one central location. Compare this with the likes of Wallmart, they have to distribute their wares to hundreds of retail locations, keep them in stock (can you say inventory issues?), etc.
DotComs should, in fact, be able to operate even more efficiently (for those limited services they provide) across the board. Almost all these other issues you and others mention could be addressed by a similarly scaled (a brick and mortar of the same scale has it no better, and many times worse) and well run DotCom. The only real nagging issue online retailers will continue to face is shipping.
Ahem. DotComs are not alone with this problem. Many companies which ship have had to contend with this issue before these DotCom were even a twinkle in some VCs eye. There are cdroms these companies buy which keep track of all the tax rates, they cope just fine. It would be a trivial matter to intergrate it within their CGIs and the like--the cost per transaction would be mere fractions of a penny. In addition, if this shipping commerce grows in popularity, there is nothing saying the federal government or some accounting standards board could not compile an official database of tax rates, to which everyone is held strictly accountable to (and nothing else, e.g., if it is out of date)...
What you are asking for is essentially a subsidy (yes, that's exactly what it is). Because the beloved online retailer can't bring the product to the consumer as cheaply, we're going to even things up with a tax disparity in their favor. In other words, the DotCom can operate 8% (or whatever tax rate) less efficiently so far as the consumer is concerned, and get away with it. On high dollar/low bulk items (e.g., computers, software, clothes, etc.) it is literally impossible for the brick and mortar to compete, because the government artifically boosts the online retailer.
Since you claim to be interested in "fairness", I ask you this. If I choose to locate my retail operation in say, Manhattan (or any mall in america for that matter), should I be given a tax benefit? If I locate my DotCom in Alaska, should I recieve a great tax benefit? And if to boot, by virtue of my location, I can't provide decent support, or help to the consumer, should I be given a further tax break? Obviously, the answer is no. The government should not try to intervene like this. Businesses should compete based on the efficiencies and services they bring to the table, not on the basis of which form of business the government seems to favor more at any given minute.
If the internet is the more efficient way to do whatever it does, it will, by definition, overcome those shipping costs, it would compete on price (though not necessarily in other departments). If the DotCom is able to compete based on the price savings they are able to generate for the consumer (not tax rates), I have no problem with that.
The reality today, however, is not anything resembling this. Most online retailers are illconcieved, operating almost entirely on lower prices (largely benefiting from not having to worry about taxes) and hype [and a few for better apparent selection]. Most online retailers even have sloppy and poorly designed sales websites. Their support is generally laughable. Their financial management is a joke. Their inventory controls are horrible...They are generally not all they are cracked up to be. There is no good reason for society to reward this lack of performance [even if it is inevitable] with an effective subsidy over their "brick and mortar" counterparts.
#include <government.hpp>
void example(void)
{
Government us;
++us;
--us;
# ERROR - operator -- not defined for class Government
bash>
In other words, governments, once enacted, do not shrink. Just as a cancerous tumor secretes substances to increase its blood supply, governments seek to increase their money supply via taxes. Just as the best way to keep a cancer from growing is to prevent angiogenesis, the best way to keep a government small is to limit its budget by limiting taxes. In fact, this was one of the very reasons that the Founding Fathers of the US prohibited the federal government from imposing an income tax (then along came the 16th amendment, which made it legal). Consider all the intrusions into your life that come about as a result of income tax:
and so on. The number of taxes we pay needs to be decreased, and more of what the federal government does needs to be done either by the state or local goverments, or (hold on to your hat, strange idea coming up) by the people themselves.
However, since the actions to make this happen must be taken by the government, who will not benefit from them, they are about as likely as the source code for Windows 2000 quantum tunneling out of Redmond into Sunsite.
www.eFax.com are spammers
First, internet purchases should be taxed. Everyone is up in arms about Wal-Mart, etc, but the real people who will lose are the small local businesses. You run a small store, you pay taxes, and fight the big corporations. Suddenly, not only are you losing to the corporations, you are losing to the tax-free internet business. You go out of business quickly, because the online merchants have a clear advantage. Also, consider how much money the governments will lose (I'm not saying we need more or less taxes, but unless taxes are lowered overall, we need the same amount of money). The brick and mortar business are paying for roads, police and fire departments, local city improvements, etc with their taxes. Yet an internet business in the same area uses all of these things, yet doesn't have to pay for any of it? That doesn't make any sense at all. If they use all of the local amenities, they should pay the same local taxes as everyone else.
The big question is how to set up the tax system. It seems charging the tax rate of the customer's local communities put a large burden on the company to keep track of every tax rate in the country. If they charge the tax rate of the city the company is in, we end up with the wealthiest cities charging internet companies almost no taxes to lure them there, which puts us in the same boat. About the only thing I can figure is to make a nationwide "internet sales tax" rate, which would then be charged on all internet purchases. This rate could be the average of all the sales tax rates nationwide, and would go to whoever normally gets the local sales tax of the customer. That way, it's fair to all involved. But we can't just say at least 50% of sales will be over the internet, and expect things to keep working normally if there's no tax on these purchases.
"Information wants to be expensive" - Stewart Brand, the same guy who said "Information wants to be free"
This is not really anything new to us in the UK, we pay VAT (value added tax or sales tax to you yanks) on most good bought from UK sites over the internet. As long as the US doesn't do anything silly like impose extra taxation for online transactions or attempt to tax goods or service that are leaving the US as exports then this is to be expected. Effectively all that has happened is a taxation 'holiday' to help things along has been in place, there is no special reason why the internet should remain tax exempt.
It's all about choice. Traditional retailers simply can't compete because there are a million and one places to buy from online.
There are sales taxes already in place... there should be no new taxes, to borrow the phrase from the former Prez.
Its amazing. When issues like deCSS or Napster come up, Slashdot is filled with posts saying: "you can't stop the net, its different from the old economy. We deserve new rules to deal with the net. Stop applying your old rules to us". As soon as the possibility of net taxes come up, we're suddenly unable to imagine new taxes? Do I smell a double standard around here somewhere?
Yes, the net is driving new forms of commerce, and we need to think about new ways for society to deal with it. The net isn't a geographical entity, so it makes no sense to impose state-based taxation on it. Why should it matter where an eCommerce store is physically based when taxation is considered?
If you have taxation, then apply it in a fair and uniform manner. An across-the-board net sales tax makes sense. If the net is such an efficient mechanism, why does it need the extra unfair advantage over bricks and mortar stores of being tax exempt?
Sailing over the event horizon
... which is exactly what you're saying.
Pretty much.
The new economy view would be to not strangle it in its crib, like you propose to do.I love rhetoric like this. All those poor struggling eCommerce companies who would go out of business if we imposed a sales tax. When we're talking about anything else on Slashdot, the the net is the unstoppable revolution that is going to blow away all that terrible old economy thinking. As soon as someone suggests a sales tax, its unthinkable because eCommerce is so vunerable.
People are welcome to take this point of view, but it is so laughably weak an argument that it will render anything else you say moot in the eyes of legislators. Unless we get some realism in here our voices will not be heard.
I agree that giving net companies a tax free breathing space in the first few years is/was a good idea. At some point we have to accept that the new economy is so strong that it is going to be the dominant force in the future. At that time, it shouldn't be exempt from taxation.
We aren't at that point yet, but its coming Real Soon Now. Starting to work out how to deal with this now will help eCommerce companies plan for the future and allow the net community to have a voice in how the taxes are established.
Sailing over the event horizon
Anyone else ever come to the conclusion that "E-Commerce" is just a dressed up version of mail oder catalogs. I for one have ordered from mail order catalogs in the past(and still do today), in addition to getting information off the web. If taxes are imposed just upon net transactions, wouldn't that boost mail order sales which would not have additional sales taxes placed upon them? As it stands in the U.S. there is no "National" sales tax. It is up to each individual state to set up the taxes. As a result, wouldn't new taxes on the internet have to be placed by the federal government due because these are interstate transactions? Also wouldn't the federal government be the recepient of these funds? I don't think traditional retailers are hurting too much by mail order orders. I still prefer to go to a real store and see and feel the object I wish to buy. For items like movies and computer hardware ordering from the internet is fine, but you won't catch me ordering an automobile online without a test drive.
Bring back the old version of slashdot.